Budget 2026: six charts that reveal the economic realities facing the chancellor
From tackling the youth jobs crisis to repairing Brexit’s economic damage, John Healey has his work cut out for him John Healey will deliver his first budget on Wednesday as UK households and businesses come under pressure from the unfolding economic shock caused by the war in the Middle East. Against a febrile backdrop in global markets, the chancellor is facing a delicate balancing act to…
John Healey, UK Chancellor, will present his first budget on Wednesday amid the economic fallout from the Middle East war. He faces the challenge of easing household and business cost-of-living pressures while promoting growth and adhering to fiscal rules. Healey will also expand on the promise of "good growth in every postcode" and devolve more power and money to local leaders.
The Resolution Foundation estimates the fiscal headroom has been cut to around £12bn, down from £23.6bn. The Office for Budget Responsibility (OBR) will assess the impact of rising debt costs and other public finance factors. Healey is prepared to reduce the headroom buffer but may retain some for potential further negative shocks.
Energy bills are expected to surge to £2,000 per year, and the Chancellor is likely to allocate over £1bn to support energy consumers. Local leaders will receive additional resources, and a new £1.5bn borrowing facility for directly elected mayors is planned. A strengthened industrial strategy and support for high streets and towns will also be part of the budget.
Healey aims to address the youth jobs crisis, particularly as young people's unemployment rate has risen to nearly 1 million. The government is working on welfare reform and apprenticeships to tackle this issue.
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